[ET Net News Agency, 25 September 2019] J.P. Morgan lowered its target price for Nine
Dragons Paper (NDP)(02689) to HK$7 from HK$13 and downgraded its rating to "neutral" from
"overweight".
The research house believes the margin contraction trend in the packaging paper industry
is not over yet. At current levels, new capacity still has a strong incentive to ramp up
quickly.
On the other hand, demand may remain sluggish due to trade tensions. JPM expects NDP's
net profit/ton will continue to decline in 2H 2019 and 2020. It cut its FY2020/21 earnings
forecasts by 38%/31% on a lower NP/ton assumption. (KL)